International air passengers up 10% despite high fuel costs, with Japan and China leading the surge

International air passenger traffic rose about 10 percent from a year earlier despite high oil prices dampening travel sentiment this year. The increase is attributed to a surge in travelers to Japan and China — driven by the weak yen and visa-free entry policies — as well as growing transit demand through Incheon International Airport in the wake of the Middle East war.

Statistics from the Ministry of Land, Infrastructure and Transport's aviation portal show that international passengers totaled about 68.435 million in the January–August period this year, up 9.8 percent from about 62.315 million in the same period last year. The number of international flights operated rose 6.6 percent to 384,700.

By region, passengers on Japan routes climbed 20.3 percent to about 21.31 million, while those on China routes rose 23.0 percent to about 13.615 million.

The combined passenger increase on Japan and China routes came to about 6.141 million, roughly matching the overall international passenger increase of about 6.12 million. The two routes together accounted for 51.0 percent of all international passengers.

The weak yen is seen as the main driver of demand for Japan travel, while China's visa-free entry policy is credited with fueling the recovery on China routes.

Particularly on China routes, passenger numbers grew 23.0 percent even as the number of flights increased only 7.9 percent, reflecting a demand recovery far outpacing supply growth. The aviation industry also notes that deteriorating China-Japan relations — with the Chinese government advising its citizens to avoid visiting Japan — have redirected more Chinese tourists to South Korea instead.

Southeast Asian routes, by contrast, posted a clear decline. Vietnam, the third-busiest destination after Japan and China, saw passengers fall 5.1 percent to about 6.626 million. The Philippines dropped 13.7 percent to about 2.501 million, and Thailand fell 13.0 percent to about 2.343 million.

"As surging international oil prices drove up fuel surcharges, travel demand shifted from Southeast Asia — which requires four to six hours of flight time — to Japan and China, which are just one to three hours away," an industry official said. "Airlines also reallocated capacity toward Japan and China routes, where load factors and profitability are higher."

Flight numbers on Southeast Asian routes also fell in the January–August period, with Vietnam down 6.6 percent, Thailand down 9.3 percent and the Philippines down 17.5 percent.

However, long-haul routes to North America and Europe showed growth despite higher fuel surcharges. North American route passengers rose 8.2 percent to about 4.961 million, while European route passengers grew 9.3 percent to about 3.478 million.

Steady demand from business travelers and students has been maintained, while Incheon has also absorbed long-haul transit traffic. Since the Middle East war began, some travelers from Southeast Asia and Australia who previously transited through the Middle East on their way to Europe have shifted to routes via Incheon.

Growing demand from Chinese travelers transiting through Incheon to North America amid US-China tensions has also contributed to the increase. International transit passengers at Incheon totaled about 5.982 million in the January–August period, up 20.1 percent from about 4.98 million in the same period last year — more than double the overall international passenger growth rate.

By region, Europe recorded the highest transit passenger growth at 53.0 percent, followed by Japan at 42.6 percent, China at 35.8 percent and North America at 12.8 percent. North America had the largest number of transit passengers at about 2.02 million.

Some carriers have benefited from the rise in transit and inbound tourism. Korean Air posted passenger business sales of 2.85 trillion won ($2.09 billion) in the second quarter — when the impact of the Middle East war intensified — up 451.4 billion won from the same period a year earlier. To meet growing demand, Korean Air has added flights on North American routes including Los Angeles, Atlanta and Vancouver, and expanded capacity on major Japan routes such as Tokyo and Osaka.

Eastar Jet and Jeju Air have recently announced plans to launch new China routes, including services to Xiamen, Hangzhou and Guilin.